- FRIDAY IS A SINGLES ONLY DAY
I cannot stress enough the importance of SINGLES ONLY FRIDAYS.
This is an add-on day. You are only looking to make a little bit more,
finish the week on a high note and go home early.
- COUNTER-TREND TUESDAY
In a market with an established trend, Tuesday’s tend to be a reversal/correction day.
Correction days are the most difficult trading days on the books.
One is forever buying the highs and selling the lows, looking for a move that never materializes.
- NEVER EVER UNDERESTIMATE THE POWER OF THE BEAR
The bear can undo years of hard work in a matter of months.
The bear can undo months of hard work in a matter of weeks.
The bear can undo weeks of hard work in a matter of days.
In 2002 the DJIA traded at 7,200. Five years later in 2007,
the DJIA traded to a high of 14,200. In sixteen months the DJIA traded as low as 6,470.
- YOU DO NOT SELL NEW CONTRACT HIGHS, YOU BUY THEM
There is a reason a market trades to new contract highs.
Picking a top is a disaster waiting to happen.
You only sell new contract highs when you are taking profits on your long position.
- MAKING MONEY IS THE EASY PART…KEEPING IT IS THE GAME
All traders know; limiting losses is vital to being a successful trader.
We have all made money in the past.
How much you keep when the market becomes difficult separates the good traders from the bad.
- DO NOT GIVE ALL OF A GREAT TRADING DAYS PROFITS BACK
You have had a good start to trading earning $5,000.
You think to yourself, $5k is a good day’s work. Should I quit trading? No.
I will have a small break and get back at it.
Set a monetary stop loss to retain your profits. I recommend 50%.
If your profits for the day fall to a $2,500 gain; quit trading.
The market opens the same time tomorrow morning.
- AFTER A GREAT TRADING DAY, THE NEXT DAY IS A SINGLES ONLY DAY
It is impossible to be a superhero two days in a row.
After a great trading day, the following day should be treated with a bit more caution.
No over-trading. There is nothing worse than having an extremely profitable day on
Tuesday and giving it all back on Wednesday.
- AFTER THREE CONSECUTIVE LOSING TRADING DAYS, TAKE A DAY OFF
After three consecutive losing days, a day off should be mandatory.
- DO NOT TURN A LOSING TRADE INTO A REAL BIG LOSER
A winning trade will keep you in the game.
A scratch trade will set you up for your next trade.
A losing trade will affect your thought process.
Cut your losses quickly. Do not turn a losing trade into a real big losing trade.
- IT IS NOT A PROFIT UNTIL YOU TAKE IT
No matter how much of a profit you have in a trade,
until you cash in your chips your profit is still at risk.
Take the money and move on to your next trade.